As Viet Nam has been mentioned as one of the main beneficiaries from relocation of international production, including possible inflows of high-quality FDI, the Government has taken steps to grasp opportunities resulting from these shifts.

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On June 17, Prime Minister Nguyen Xuan Phuc decided to establish a working group to promote foreign investment cooperation in an effort to lure high-quality FDI waves.

So far, Viet Nam houses 32,000 FDI projects with a total register capital of over US$ 378 billion from 136 countries and territories.

In the first eight months of 2020, the FDI inflows experienced declines of 13.7% in newly registered capital and 5% of disbursement capital while global FDI was estimated to plunge 40% in 2020. Hence, Viet Nam remains a charming destination in the eyes of foreign investors.

First signals show the S-shaped country is likely to attract high-quality foreign investment amidst relocation of production sites, which would help diversify supply chains and reduce heavy reliance on a single market in the region and the world.

For example, Apple announced to produce millions of its popular AirPods wireless earphones in Viet Nam for the first time in Q2. Some 3 million to 4 million units, or around 30% of total classic AirPods production would be "made in Viet Nam”. Nikkei said this was a sign the U.S. tech giant is accelerating its diversification of production amid the coronavirus pandemic.

Google, Microsoft and Panasonic are also planning to relocate some of their manufacturing lines to Viet Nam while others such as Pegatron, Amazon and Home Depot are also considering Viet Nam as one of the destinations for their supply chains.

Viet Nam owns a series of advantages in attracting FDI such as a large population with a growing middle class, a young workforce with high mobility and lower labor costs and land lease prices compared with regional countries such as Thailand, Malaysia and Indonesia.

The corporate income tax rate in Viet Nam is also among the lowest in Southeast Asia and enterprises in industrial parks are enjoying tax and visa incentives.

The country also boasts for favorable geographical location, stable economic and political environment, fast-growing economy, new-generation free trade agreements and successful coronavirus containment which add to the country’s status as an attractive destination for foreign investment.

High-quality FDI flows not only involve large capital and a high level of advanced technology, but also give the recipient country a new stature in the networks of production and technology as well as opportunities for global financial investment, tourism and services.

Therefore, in order to attract high-quality FDI and raise the ratio of enterprises which employ advanced technology and are environmentally friendly by 50% in 2025 and 100% in 2030 as compared with 2018, it is necessary to introduce appropriate policies and specific plans./.